The firm said it was encouraged Woodford was sticking to “his tried and tested approach” to fund management, and backed his ‘barbell’ style of management with larger companies contributing to the dividend income and smaller firms boosting growth.
The backing of Hargreaves Lansdown, one of most well-known adviser firms in the industry, follows an “annus horribilis” for Woodford.
He has suffered a number of setbacks, from plummeting share prices in key holdings such as Allied Minds and Provident Financial to a number of investors pulling their money out of the flagship income fund.
The troubled year has prompted fears the fund could fall out of the IA Equity Income Sector which demands a fund’s yield matches at least 100% of the FSTE All Share yield.
So far Woodford has failed to hit 100% in both 2015 and 2016, if he misses it for a third year he risks expulsion from the sector.
However, Woodford has consistently spoken of his conviction in his domestic-centric holdings despite the fund’s underperformance, claiming the UK economy will hold up better than many others believe.
Hargreaves Lansdown has also backed his assertion and said: “Overall, we’re encouraged that Neil Woodford is sticking to his tried-and-tested approach. He combines economic views and individual company analysis to identify undervalued and out-of-favour sectors and companies. At present this manifests itself in significant exposure to UK domestic businesses and, to a lesser extent, small and innovative healthcare businesses.
“The willingness to follow his convictions rather than the herd has seen him generate exceptional returns for investors in the past, but by its very nature this approach will result in periods of poor performance while other investors disagree with his views.
“We believe it’s premature to write Neil Woodford off. His long-term track record has been exceptional and we continue to believe he’ll add value for investors over the long run.”
